West Coast port slowdown remains a dangerous standoff

SAN FRANCISCO (KTVU) -- A popular "Made in San Francisco" product that is sold worldwide on Friday finds itself facing huge additional expenses because of the ongoing West Coast port slowdown.

Timbuk2 has a worldwide internet reach where you can custom order a bag of your own creation from a universe of possibilities. The bags are made in San Francisco, but the business also has retail stores in SF, in LA's Venice Beach, Seattle, Chicago, Denver, Toronto and Singapore. Plus, there are many retailers around the nation that also sell Timbuk2 bags.

But the materials Timbuk2 needs to keep production going are in sea containers caught up in the port slowdown.

"The parts that we have been waiting are supposed to come maybe three or four weeks ago. Due to that, it's just impacting our channels up and down," said Timbuk2 Operations Manager R.J. Atengco.

The containers the company is waiting for contain the raw materials they absolutely need in order to keep making bags. It's possible that the containers could be on the ship, sitting at the dock. They could be out in the ocean or, perhaps, in Timbuktu.

"We definitely do have to turn certain products off, online because of parts that are not here; fabrics to be more specific," said Atengco.

So, Timbuk2 has elected to air freight materials at an enormous additional cost which it will not pass on to customers.

"We have to eat the cost. The one thing you don't want to do is definitely impact the customer," explained Atengco.

This West Coast port mess has gotten so bad that the CEO of Scott Taylor GSC Logistics – which handles ten percent of Port of Oakland's containers – told KTVU it has reached critical mass.

"We're dying. We're just going out of business; real slow here," said Taylor. He says there's so much congestion, GSC has 350 empty containers that the terminal refuses to take back. He's just days from a completely gridlocked lot, reduced hours and layoffs.

Taylor said that would show up very quickly at major retailers we all know.

"You sure would, every one of them, and they've got empty shelves," said Taylor. Empty shelves that he says will be coming soon to a store near you.